Show your work Please! Refer to the following information for Questions 30-33. n

Question

Show your work Please!

Refer to the following information for Questions 30-33. n January 1, 2011, Kendall Inc. began construction of an automated cattle feeder system. The system was finished and ready for use on September 30, 2012. Expenditures on the project were as follows: January 1, 2011 . September 1, 2011 December 31, 201 $200.000 $300,000.-t $300,000 $300,000 $200,000 March 31. 2012 September 30. 2012 Kendall borrowed $750,000 on a construction loan af2% interest on January 1, Kendall borrowed $750,000 on a construction loan at 129 interest on January 1, 2011. This loan was outstanding throughout the construction period. The company had payable outstanding in 2011 and 2012. $4,500,000 in 9% bonds

Explanation / Answer

32)
Jan 1 2011=200,000
Sep 1,2011 300,000
Dec 31 2011=300,000
Mar 31,2013=300,000
Sep 30,2012=200,000

Borrowed 750,000 at 12% on jan 1 2011. Also borrowed $4,500,000 in 9%

Interest capitalized in 2011:
200k*12%*12/12+300k*12%*4/12+300k*12%*0/12=36k

Acc exp in 2011=200k+300k+300k+36k=836k

in 2012:
300k*6/9+200k*0/9=300k
total=300k+836k=1036k

Interest capitalized in 2012:
=750k*12%*9/12=67,500
Excess: (1036k-750k)=286k
=286k*9%*9/12=19305
total=19305+67500=$86,805

FInal cost:

=836k+86805+300k+200k=$1,422,805

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